Months after the final batch of one-cent coins rolled off the presses, lawmakers across the United States are wrestling with an unexpected consequence of the penny’s decline: how to handle everyday cash purchases without the tiny coin.
The shift began early last year when Donald Trump announced that the federal government would stop producing new pennies, arguing that the coin had become too expensive to justify. According to the United States Mint, it cost about 3.7 cents to manufacture a single penny in 2024—more than triple its face value.
Although production has ended, the United States Department of the Treasury says the roughly 114 billion pennies already in circulation will remain legal tender and continue to be used “as long as possible.” Still, the sudden halt in minting triggered shortages in cash registers last summer, forcing retailers and consumers to adapt to a future where exact change may not always be possible.
The Rise of Rounding
To solve the problem, many policymakers and businesses are turning to a system known as symmetrical rounding. Under this method, cash totals are rounded to the nearest five cents.
If the total after taxes ends in one, two, six, or seven cents, the price rounds down. For instance, a purchase of $1.91 would become $1.90. Totals ending in three, four, eight, or nine cents are rounded up. A bill of $1.98 or $1.99 would become $2.00.
Supporters say the approach is simple and fair, because prices should theoretically round down just as often as they round up.
A federal bill introduced in Congress would standardize the practice nationwide. The proposal, championed by Michigan Republican Rep. Lisa McClain, passed out of the House Financial Services Committee but has not yet received a full vote in the House or Senate.
McClain has argued that a national rule would prevent a confusing “patchwork” of state policies.
States Moving Ahead on Their Own
While federal lawmakers debate the issue, several states are moving forward with their own solutions.
Legislation addressing penny-free cash transactions has passed both chambers in states including Arizona, Florida, Oregon, Tennessee, Virginia, and Washington. Some of these proposals would allow businesses to round prices voluntarily, while others would require them to do so.
In Indiana, Republican Gov. Mike Braun recently signed legislation requiring businesses to round cash purchases that do not end in zero or five cents. Lawmakers later introduced a follow-up measure that would make rounding optional, giving businesses flexibility in how they apply the rule.
Meanwhile, in Tennessee, legislation backed by state Rep. Charlie Baum protects businesses from consumer protection lawsuits related to rounding but does not mandate that they use the practice.
Across the country, about two dozen states have introduced rounding bills since late last year.
Will Consumers Pay the Price?
Government officials say rounding should not raise prices overall. The Treasury has argued that purchases will be rounded down just as often as they are rounded up, meaning consumers should not see a net loss.
However, research from the Federal Reserve Bank of Richmond suggests the situation may not be perfectly balanced. A survey conducted in 2023 found that many prices tend to end in eight or nine cents, which means totals could be rounded up slightly more often than down.
Over time, that imbalance could collectively shift millions of dollars from consumers to businesses—though for any single person, the difference might only amount to a few pennies.
Still, some shoppers have taken to social media to complain that the rounding system feels unfair.
A Practical Reality
For many people, the issue is less about fairness and more about practicality.
Nikki Capozzo-Hennessy, a Connecticut resident who runs a food truck, recently noticed a rounding adjustment on a grocery receipt totaling $8.73. The store rounded down, giving her a three-cent discount.
She said that while a few cents might not matter much individually, the small changes could add up over time.
“At the end of the day it’s three cents,” she said. “But I can imagine with all the purchases that you make, it can add up.”
Lawmakers like Washington state Rep. April Berg say there may be little choice now that the penny is effectively on its way out.
At the same time, the Treasury estimates ending penny production will save about $56 million per year. But the shift could bring another challenge: increased demand for nickels, which are even more expensive to make. In 2024, the Mint reported that producing a five-cent coin cost nearly 14 cents.
To address that problem, the federal proposal would allow the Treasury to change the nickel’s metal composition, potentially reducing manufacturing costs.
For now, the penny isn’t completely gone—but as the coin gradually fades from everyday transactions, Americans are likely to see more prices rounded to the nearest nickel.
